Differbetween
Arbitrage funds refer to equity focused mutual fund that is ideal for risk-averse investors looking to gain profit from volatile markets. On the other hand, fixed deposits refer to financial instruments that provide investors with a higher interest rate on investments until the maturity date.
- Are arbitrage funds still worth it?
- Are arbitrage funds better than liquid funds?
- What is arbitrage fund?
- What is the best alternative to fixed deposits?
- Is it a good time to invest in arbitrage funds?
- Why do arbitrage funds give negative returns?
- Are arbitrage funds risk free?
- Which arbitrage fund is good?
- Which is the best liquid funds in India?
- Is arbitrage fund tax free?
- How safe is arbitrage fund?
- What does arbitrage mean?
Are arbitrage funds still worth it?
Typically, this portion is invested in low- risk bank debt or just bank FDs, but you should still check this. “Investors with a time horizon of six months to three years and who are in the 30% tax bracket should consider arbitrage funds. But do not keep all your eggs in one basket.
Are arbitrage funds better than liquid funds?
As you can see, arbitrage funds do hold potential to generate higher returns in their best periods. But liquid funds have done better than arbitrage even in their worst periods (i.e., liquid funds' minimum returns was still higher than that of arbitrage funds').
What is arbitrage fund?
Definition: Arbitrage fund is a type of mutual fund that leverages the price differential in the cash and derivatives market to generate returns. These funds are hybrid in nature as they have the provision of investing a sizeable portion of the portfolio in debt markets. ...
What is the best alternative to fixed deposits?
Debt mutual funds invest in comparatively secured investment options such as corporate bonds, government securities and money market instruments. These are considered relatively safer than other mutual funds as they invest in high-rated fixed income securities.
Is it a good time to invest in arbitrage funds?
Arbitrage funds are ideal for investors with a short term horizon of one to one and a half years. Such a time period gives sufficient time to allow positions to play out and also provides tax efficient returns.
Why do arbitrage funds give negative returns?
We tell you why returns from arbitrage funds are low and should you invest. Arbitrage funds aim to capture the price difference between the spot and the futures market. ... “At times, this spread can turn negative—when the futures market is at a discount to the spot.
Are arbitrage funds risk free?
Investor interest in arbitrage funds, a low risk product, had been high in recent weeks because of their worry over debt funds. ... The debt component is not high in arbitrage funds as the fund houses have to keep the average equity exposure above 65% to avail of equity taxation benefits.
Which arbitrage fund is good?
Arbitrage mutual funds are hybrid in nature and in times of high or persistent volatility, these funds offer relatively risk-free returns to investors.
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1. L&T Arbitrage Opportunities Fund.
| L&T Arbitrage Opportunities Fund Growth | |
|---|---|
| Launch Date | 30 Jun 14 |
| Risk | Moderately Low |
| Expense Ratio | 0.96 |
| Sharpe Ratio | -0.25 |
Which is the best liquid funds in India?
Top 10 Liquid Mutual Funds
| Fund Name | Category | 1Y Returns |
|---|---|---|
| Nippon India Liquid Fund | Debt | 3.7% |
| Aditya Birla Sun Life Liquid Fund | Debt | 3.7% |
| LIC MF Liquid Fund | Debt | 3.6% |
| Tata Liquid Fund | Debt | 3.6% |
Is arbitrage fund tax free?
These funds are treated as equity funds for taxation. If you stay invested for less than one year, then you make short-term capital gains (STCG) which are taxable. STCG is taxed at a rate of 15%. If you stay invested for more than a year, then gains will be considered as long-term capital gains (LTCG).
How safe is arbitrage fund?
But I would say that arbitrage funds are reasonably safe by their design and I don't think they are completely vulnerable to investors' action. These funds do not take any credit risk rather they derive their returns from mispricing between the cash and derivatives market for equities.
What does arbitrage mean?
Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from tiny differences in the asset's listed price. It exploits short-lived variations in the price of identical or similar financial instruments in different markets or in different forms.
